April 5, 2019

CFTC Staff Provides Further Brexit-Related Market Certainty

Washington, DC — The Commodity Futures Trading Commission’s (CFTC) Divisions of Swap Dealer and Intermediary Oversight (DSIO), Market Oversight (DMO), and Clearing and Risk (DCR), today announced they will grant no-action relief to provide greater certainty to the global marketplace in connection with the anticipated withdrawal of the United Kingdom of Great Britain and Northern Ireland (UK) from the European Union (EU) with or without a ratified withdrawal agreement (Brexit).

“At a time of heightened market uncertainty caused by Brexit, this Commission has worked over the past several weeks to bring clarity to participants in global derivatives markets by a series of separate actions and statements with its regulatory counterparts in other jurisdictions,” said CFTC Chairman J. Christopher Giancarlo. "Today Commission staff takes another important step to bring certainty to the global derivatives markets.” 

DSIO, DMO, and DCR are providing regulatory certainty by issuing two joint staff letters. The first letter ensures that existing regulatory relief provided by DSIO, DMO, and DCR pursuant to certain staff letters affecting EU entities continues to be available for UK entities following Brexit. In the second letter, DSIO and DMO provide time-limited no-action relief to ensure the continued availability, following Brexit, of substituted compliance and regulatory relief under certain existing CFTC comparability determinations and exemption orders originally issued by the CFTC for EU entities, while CFTC staff undertakes an analysis of UK law in order to make appropriate recommendations of comparability or exemption to the CFTC.

The staff positions and time-limited relief in each of the letters will become effective if and when the UK withdraws from the EU. As of the date of this release, it is anticipated that such withdrawal may occur on April 12, 2019.

These measures show that the CFTC is committed to taking measures to ensure that the UK’s withdrawal from the EU, in whatever form it takes, will not create regulatory uncertainty regarding derivatives market activity between the UK and United States. These measures will help support financial stability and the sound functioning of global financial markets. They also will give confidence to market participants about their ability to trade and manage risk through these markets.